June 3, 2023


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Real Estate Investment Trusts - Property Finds Asia

Bhavna Suresh, CEO of Lamudi, moderated the media roundtable discussion. The panelists of the media roundtable were Joey Bondoc, Senior Research Manager of Colliers International Philippines; Reggie Cariaso, Head of Strategy, Products, and Support under the Corporate Banking Group of the Bank of the Philippine Islands (BPI); Hannah Yulo, Chief Investment Officer of DoubleDragon Properties Corp.; and Gary Hablero, Director for Commercial Investments at RE/MAX Capital.

A Closer Look at Real Estate Investment Trusts in the Philippines

Real Estate Investment Trusts have made significant strides as an investment option for Filipinos. Due to its growth driven by the recent tax reforms, more REITs are springing up, making it an attractive property investment for middle-income families and OFWs.

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Lamudi held its third installment of The Outlook Media Roundtable Series for 2019, “A Collaboration Towards Economic Prosperity: Understanding Real Estate Investment Trusts for Investors”, in partnership with Colliers International Philippines, Subdivision and Housing Developers Association, and Holcim Philippines, last August 6 at the Makati Shangri-La.

Promising Amendments to the REIT Act of 2009

The amended act provides the legal framework for Real Estate Investment Trusts as the Implementing Rules and Regulations with objectives consistent with the declared policy of the state: to promote the development of the capital market, democratize wealth by broadening the participation of Filipinos to own real estate properties in the country, use capital market as an instrument to help finance and develop infrastructure projects, and protect the investing public.

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Ms. Hannah Yulo, Chief Investment Officer of DoubleDragon Properties Corp.

At first, REITs faced certain roadblocks on government issues such as Value Added Tax (VAT) and the Minimum Public Ownership (MPO) which refrained it from moving forward. Then after a decade or so, the government amended the REIT Law in accordance with Tax Reform for Acceleration and Inclusion, and the Build, Build, Build Project which will help further boost real estate developments in the country.

Furthermore, Philippine Stock Exchange (PSE) has drafted revisions for REITs listings’ rulings and the Security and Exchange Commission (SEC) allowing foreign investors but with restriction to abide as written under Section 8 of the Republic Act No. 9856 (REIT Law) as “to… develop the country’s real estate investment industry to make it globally competitive.”

Understanding REITs

In an investment perspective, REIT is a public-listed stock corporation which includes malls, offices, hotels, warehouses, and other infrastructures which are income-generating real estate assets to purchase, lease, re-sell and manage. The types of REITs are commercial REITs, retail REITs, industrial REITs, hospitality REITs, and healthcare REITs.

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Mr. Reggie Cariaso, Head of Strategy, Products, and Support under the Corporate Banking Group of the Bank of the Philippine Islands (BPI)

For a company to offer REITs services, it should pass the requirements of the state. Then, it would look for investors to place capital and hire property managers. This REIT company will do the work for its properties to generate income through leasing.

The REIT risks are diluted because you will invest in a pool of properties from the REIT company, but the prices are subject on the demand and supply of conditions. Just like in stocks, you can buy and sell your shares for REITs listed companies as tax policies have been amended. The dividend will be given in the form of cash, property, or stock dividends.

Certainly, investors will benefit and maximize from the government’s ambitious infrastructure development plans in the country. As real estate continues to progress in the country, the need for construction grows. The leading building solutions provider, Holcim Philippines recently launched its new product called Solido, a special blended cement formulated to be more environmentally friendly.

REITs Global Competitiveness

Through REITs, a Filipino can own and invest in properties without the hassle of managing because a professional management team will handle everything for the investor. A purchase of REIT shares means partial ownership of the property with a team who will do the work. All that is needed is the purchase or sale of REITs shares. REITs are modeled after mutual funds and traded on major stock exchanges.

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Mr. Joey Bondoc, Senior Research Manager of Colliers International Philippines

Now is the right time for REITs to fully wave together with the G7 countries of Canada, France, Germany, Italy, Japan, United Kingdom, and the United States, and other 40 countries worldwide. In the global setting, most countries adopted the U.S. approach of REITs portfolio in offering the easiest access and most efficient way. Aside from real estate, assets such as energy, transportation, hospitals, schools, and tourism are also convertible into REITs.

According to Colliers International, “now is the most opportune time to launch REITs as the Philippine property market has been on an upswing.” The discussion about the value of REITs for investors, both in the local and the international setting will gear it towards economic prosperity and beyond.

The Outlook Conference and Gala Night

Lamudi is looking forward to the next two events in October and November 2019 at Makati Shangri-La: The Outlook Conference and The Outlook Gala Night, respectively.

Discussions during The Outlook Conference will cover the following important topics in the real estate industry today:

Smart Planning: Creating Property Value in New Markets — This will identify various approaches to project planning in order for real estate developers to create impactful developments based on specific preferences and demands from the market.

New-Age Customer Experience: Transforming Real Estate Marketing in the Age of Disruption — The discussion will explore the role of disruption in shaping a new breed of real estate clients along with strategies that should be adapted to thrive in this new consumer environment.

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Mr. Gary Hablero, Director for Commercial Investments at RE/MAX Capital

Fresh Perspectives: Mapping the New Real Estate Sales Matrix — This discussion will identify new business models, strategies, and cutting-edge developments that have drastically improved how real estate is offered to customers. Likewise, it will present new ideas, best practices, and case studies from all around the country.

Paradigm Shifts: Exploring the Sharing Economy in Philippine Real Estate — The discussion will explore the conditions that brought about the boom of sharing economy and will dive into the possible impacts of co-working and co-living to real estate in the future.

Changing Face: Uncovering Alternative Ways to Invest in Real Estate — The discussion will zero in on what’s driving investor demand, the new investment opportunities available in the market, and how the market can tap into these to encourage a robust real estate economy.

The Outlook Conference, happening on October 17, 2019, will enable real estate professionals to understand the current trends and a means to cope-up with the consumer’s changing needs. This event will be a great venue for discussion and knowledge-sharing about the industry.

After two consecutive years of success in 2017 and 2018, the much-awaited gathering of real estate companies in the country is set to happen on November 14, 2019. The Outlook 2019 awards gala, which will take place on November 14, 2019, at Makati Shangri-La, will give due recognition to the trailblazers of Philippine real estate and the property developments that made the most significant impact in the past year. For more information about The Outlook 2019, visit www.lamudi.com.ph/outlook2019.

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